Current Issue Summary:
June 2019 (Vol. 59, Issue 2)
SEGMENTATION and TARGETING
What Do We Know about Segmentation and Targeting?
Segmentation focuses on the process of dividing the general marketplace into subgroups of consumers with similar wants and needs to serve as targets for promotional efforts. Targeting takes that process one step further, using promotional tactics to reach the identified market segments. “In the digital age, precision in segmentation and targeting has immense potential,” Editor-in-Chief John Ford writes as he highlights articles in the current issue’s special section on this topic. “But more information doesn’t necessarily translate into better information, and there are many questions about the quality of big data,” as explained in the summaries that follow.
WHAT WE KNOW ABOUT SEGMENTATION AND TARGETING
Precise Targeting Foiled by Imprecise Data: Why Weak Data Accuracy and Coverage Threaten Advertising Effectiveness
In their essay, Sequent Partners’ Alice Sylvester and Jim Spaeth explore weak accuracy and coverage in sampling data that marketers buy from vendors when organizing a targeting campaign. The consulting duo blame the lack of progress on what they see as a dearth of research “about missing and misidentifying consumers when using commercially available target segments for digital campaigns.” Moreover, they point to how the resulting inaccurate targeting creates significant problems in consumer negative sentiment while also hurting ROI. Sylvester and Spaeth argue that “brands struggle to reach enough of their target population given crippling media fragmentation.” The situation is further complicated by difficulties created by using surnames and geographic locations to target particular ethnic groups—a problem that can compromise research within culturally mixed families and groups with ethnic geographic dispersion. Brands, the consultants offer, can protect themselves by
- demanding that vendors show evidence of correct segment identification,
- defending their definitions of accuracy, and
- validating key groups and increasing coverage.
Straight to the Heart of Your Target Audience: Personalized Advertising Systems Based on Wearable Technology and Heart-Rate Variability
The Speaker’s Box column invites academics and practitioners to identify significant areas of research affecting advertising and marketing. Its goal: to bridge the gap between the length of time it takes to produce rigorous work and the acceleration of change within practice. In this edition, David C. Orazi (Monash University) and Greg Nyilasy (University of Melbourne) cite the expanding market for wearable technology, predominantly driven by smartwatches, that “may afford a twofold solution” to targeting challenges. The researchers focus on the importance of the match between the advertisement message and the personal condition and/or emotional state of the audience. “Sensor technology integrated into wearables can capture the audience’s emotions through biometric features extraction,” the authors write, “most importantly heart-rate variability, paving the way for interactive, personalized advertising systems that allow for temporal segmentation and targeting.” To demonstrate how biometric information, such as heart-rate variability, can be extracted from wearables for helping to shape advertising campaigns, Orazi and Nyilasy use the example of an advertiser developing a public-service announcement against drunk driving. The advertiser could shape the narrative to high-stress audiences (“who may be prefer a definite ending that provides closure and allows them to focus on the key takeaway”) and low-stress audiences (who are “more persuaded by a vague ending that allows to conjecture the possible outcome”). “Under these premises”:
- The wearable device records the audience’s heart-rate for a given time segment;
- Biometric information is communicated to the advertisers;
- Advertisers extract from the raw signal the necessary metrics indexical of stress to identify the audience;
- Advertisers create two versions of the ad (one withholding the ending and the other disclosing it);
- Either ad is delivered through the same wearable device to match the appropriate audience profile.
Wearables offer significant opportunities for more effective communications, however the significant related ethical questions involved should not be ignored, the authors conclude.
How Do Human Attitudes and Values Predict Online Marketing Responsiveness? Comparing Consumer Segmentation Bases toward Brand Purchase and Marketing Response
Marketers for years have struggled with the way effectiveness of, and response toward, different marketing tools varies greatly across consumer groups. Although research has explored issues of segmentation over the years, it has “not yet reached a state where definitive recommendations can be made on which model works best in which context, such as relating different consumer groups to varying degrees of online-marketing responsiveness,” Stephan Scheuffelen, Jan Kemper, and Malte Brettel (all from RWTH Aachen University), charge. (Scheuffelen also is a project leader at Boston Consulting Group near Berlin, and Kemper is managing director of Omio, an online travel agency). In their research collaboration, they asked: “Which type of segmentation base produces segments with more differentiated marketing-response behavior?” Using survey data from 3,219 German consumers from a Europe-based online retailer, along with 163,000 clicks from their consumer database, the research explores the results of three different segmentation models:
- human-value based,
- fashion-attitude based, and
- online shopping-attitude based.
“This study compares human values and attitudes, segmentation bases widely applied in practice, in terms of their predictive power on online-marketing responsiveness,” the authors write—that is, how researchers can “differentiate consumers’ click and order behavior in different online-marketing channels and brand-purchase behavior.” Scheuffelen, Kemper, and Brettel believe that their work applies and validates the value-attitude-behavior hierarchy to segmentation research. It also:
- Finds that attitudes appear to produce better results than human values and that fashion attitudes produce much better results than online-shopping attitudes;
- Demonstrates that practitioners will be able to custom tailor and fine-tune their segmentation models for their specific needs in online marketing to link them closely to actual click and order behavior of consumers;
- Reveals a caveat: Segmentation bases often are chosen ad hoc and based on mere data availability. To guard against such concerns, the paper advises that practitioners should identify the expected findings and then choose the most appropriate base.
Adolescent Perceptions of Black-Oriented Media: “The Day Beyoncé Turned Black”: Can Black-Oriented Films and TV Programs Be Marketed More Broadly?
“Black-oriented media, content with predominantly black casts or racial themes, is marketed primarily toward black audiences, but how audiences perceive such targeting is unclear,” Morgan E. Ellithorpe (Michigan State University)—and Michael Hennessy and Amy Bleakley (both from the University of Pennsylvania)—observe. Using data from 1,000 non-Hispanic African-American respondents and 990 non-Hispanic Caucasian respondents, the researchers assessed these audiences’ perceptions of the targeting audiences for black-oriented media. They identified adolescents ages 14-17 years, and, found, as expected, that black adolescents tend to “distinguish between black-oriented and mainstream media in terms of to whom they expect such content is targeted.” Moreover, black adolescents reflected strong ethnic identities, whereas white adolescents reported that they did not have much exposure to black-oriented media. Among other takeaways:
- There is a disconnect between perception and behavior, such that white adolescents often perceive black-oriented media as being for them, yet they still do not watch it—potentially the result of the fact that white adolescents do not receive as many marketing messages about the black-oriented content as black adolescents do.
- For marketing practitioners, the study shows there may be an opportunity to target content more broadly.
- Encouraging authentic diversity of race, perspective, and culture in mainstream media is a worthy goal, and it may be that black-oriented and other target-specific content really can be for everyone.
How Advertisers Can Target Arab E-Consumers More Effectively: A Framework for Localizing Digital Advertising and Marketing Content to Arab E-Consumers
An important target audience appears to be missing from mainstream research on segmentation and targeting: the Arab e-consumer. Mamoun Benmamoun and Nitish Singh (both from Saint Louis University) and Rana Sobh (Qatar University) sought to fill that void by conducting two studies. The first one used focus groups to explore localization themes by surveying and speaking with Arabs from Qatar, the United Arab Emirates, Palestine, Lebanon, Saudi Arabia, Bahrain, and Egypt, (and a few participants of Indian and Pakistani descent). The second study surveyed residents from Qatar and UAE about their website preferences. The outcomes of Benmamoun’s and Singh’s work can help marketers targeting this population, including:
- Website localization and cultural customization of Arabic digital content can influence Arab e-consumers’ purchase intention.
- Arabic millennials are an important target audience for e-commerce. Global digital advertisers and marketers effectively can connect with them by infusing digital content with local cultural values and markers.
- Arab e-consumers’ preferences and purchase intentions relate significantly to the functional and sociocultural aspects of the digital content, primarily customer support, security, privacy, navigational aids, visual marketing, and cultural marketers conforming with religious and dietary principles.
- Marketers and advertisers should use digital advertising and other digital content that reflects local cultural values and markers as advertising media to achieve better responses from online users.
- The authors’ theoretically derived and empirically tested framework for Arabic digital-media localization can help managers localize their digital advertising and marketing for Arabic e-consumers.
Positive vs. Negative Messaging in Discouraging Drunken Driving: Matching Behavior Consequences with Target Groups
Substantial resources have been invested in educating the public about the danger of driving under the influence of alcohol, including advertisements with antidrunk–driving messaging. “Most messages have struck a negative tone and resorted to fear appeals,” according to a group of Chinese researchers who explored different mechanisms for promoting anti-drunk-driving messages. But, they note, fear appeals, “have limitations and can be ineffectual under certain conditions or for certain target groups.” Lefa Teng, Yuanyuan Wu, Hongyu Fu and Jiajing Wang (all from Jiangnan University) and Guangzhi Zhao (Loyola University Maryland) used online surveys as they conducted two studies involving adult Chinese respondents. They found that:
- A negative message of DUI (driving under the influence) is the most effective when it is coupled with social consequences of DUI;
- The presence of social consequences is more powerful than the common approach, whereby negative physical consequences, such as injury or death, are highlighted;
- A positive message frame can be quite potent at dissuading people from drinking and driving when coupled with the financial or physical consequences of DUI.
OTHER FEATURE ARTICLES
Six-Second Advertisements on Television: Best Practices for Capturing Visual Attention
Six-second advertisements are used widely in digital video but only recently have appeared on television. As linear (scheduled programming) television and digital video started to converge through platforms such as over-the-top (i.e., delivered through the Internet), it was not surprising that linear television networks began running six-second advertisements in 2017. The current study, by Henry G. Wolf VII and Paul Donato (Advertising Research Foundation) evaluated the effectiveness of more than 3,000 of these shorter six-second advertisements (“sixes”) against 15-second (“15s”) and 30-second (“30s”) advertisements. The authors found:
- Roughly 69 percent of all commercials receive no visual attention; 27 percent air in an empty room.
- Pod position was important for all ad lengths, with solo being best, followed by first in a pod, then last in a pod, and finally in the middle of a pod.
- Ads on broadcast television received more visual attention than those on cable.
- Older viewers were more likely than younger viewers to pay attention to advertisements.
- Factors that increased visual attention to 15s and 30s were similar while those important for sixes often were different than those for the longer advertisements.
Daypart had the biggest effect on visual attention for 15s and 30s. Conversely, daypart did not play a significant role in visual attention to sixes. Instead, advertisement pairing and pod position both played an important role for sixes. Placing up to a total of four advertisements from one brand in the same program could increase attention to sixes. Time shifting also tended to increase visual attention to sixes. Although the study’s results show a clear relationship between advertisement length and visual attention, it was not possible to determine whether advertisement length had an effect on factors such as brand awareness and intent to purchase. Wolf and Donato recommend that future research focus on finding a causal relationship between advertisement lengths, visual attention, and cognitive change.
Editorial Content in Native Advertising: How Do Brand Placement and Content Quality Affect Native-Advertising Effectiveness?
Although native advertising has become a popular practice, only a few empirical studies have examined its persuasive effects. Two Korean researchers—Yoori Hwang (Myongji University) and Se-Hoon Jeong (Korea University)—saw this research gap as an opportunity to study the effects of editorial content in native advertising, specifically examining the effect of brand placement in editorial content on consumers’ responses to native advertising. They also studied whether the effect was moderated by either high or low quality of editorial content. In an online experiment with 264 participating adults selected from a panel of 1 million people, the authors created a native ad in news format based on an existing native ad published on The Huffington Post Korea news site, sponsored by VISA , called “The Mistakes that Koreans Are Likely to Make when They Plan International Vacations.” To manipulate content quality (high vs. low) the authors manipulated the number of mistakes by Korean travelers listed in the article, for example in the high-quality condition:
- Lack of unique experiences as a result of too much reliance on others’ blogs;
- Lack of adventure seeking because of unwillingness to travel alone;
- Lack of fun and enjoyment because of too much concern about travel expenses.
In the low-quality condition, only one mistake was presented (lack of unique experiences). To manipulate brand placement, the authors created three different conditions (no placement versus implicit placement) that reinforced why having a VISA card would ensure worry-free travel. Results of the experiment “showed significant interaction effects between brand placement and content quality,” the authors write. “Brand placement had negative effects on source credibility and message attitudes only when the quality of editorial content was low, not when the quality was high.” Among the practical takeaways:
- Practitioners need to pay close attention to the quality of editorial content when planning and designing native-advertising campaigns.
- Brand placement can induce negative source and message perceptions when the quality of the editorial content is low.
- When an adviser mentions a sponsoring brand in editorial content, the quality of editorial content should be high.
Effects of Face Images and Face Pareidolia on Consumers’ Responses to Print Advertising: An Empirical Investigation
Every day, a team of American and Italian researchers observe, a regular consumer sees on average several hundred commercial messages across the five main media—television, radio, Internet, newspapers, and magazines. Clearly the competition for attention is fierce, and “played on smaller and smaller time frames.” With this in mind, Gianluigi Guido (University of Salento), Marco Pichierri (University of Bologna), Giovanni Pino (University of Salento), and Rajan Nataraajan (Auburn University) investigated whether print advertisements featuring faces or face-like images (otherwise known as pareidolian ads) better capture consumer attention than ads that do not include such elements. They conducted two studies examining the effects of exposing consumers to print ads containing faces or pareidolian images for short time lapses—one-half, one, and three seconds. “The results show that both advertisement types captured viewers’ attention and more frequently were recognized than advertisements that did not feature faces or face-like objects,” the authors write. Among other findings:
- Face and pareidolian advertisements lead to greater advertisement and brand recognition than other advertisements.
- With increasing time exposure, the attention-grabbing capacity of face and pareidolian advertisements gradually decreases.
How Do Consumers Choose Sellers in E-Marketplaces? The Role of Display Price and Sellers’ Review Volume
It’s an activity many of us do on a daily basis: making shopping decisions online. Many of those decisions are informed by information posted by reviewers, not just about product quality and value (price) but also about the service provided by the seller. Saravana Jaikumar (Indian Institute of Management Calcutta) conducted two studies to find out how people select vendors when shopping online. He hypothesized:
- When the display price is low for a product in an online marketplace, consumers more (less) likely will purchase the product from the low-price seller if that seller has high (low) review volume compared with the other seller.
- When the display price is high for a product in an online marketplace, consumers more (less) likely will purchase the product from the high-price seller if that seller has high (low) review volume compared with the other seller.
There were two experiments. In the first one, Jaikumar invited visitors at a shopping mall to participate in a questionnaire, asking them, among other things, to rate the likelihood of purchase from a seller offering display price and to answer questions that captured their degree of involvement with the product, a multivitamin. This allowed him to create an index of degree of involvement. In the second experiment, he used eye tracking to validate the results obtained in Study 1. Study 2 had three objectives:
- Illustrate that the price displayed prominently in the product page acted as the anchor,
- Illustrate that the differences in choices arose because of seller-review volumes, and
- Demonstrate that the effects were generalizable across different products.
Among the takeaways:
- Seller choice is a function of display price and sellers’ review volume” where multiple sellers offer the same product.
- Consumers use the display price as an anchor and then compare sellers on the basis of their review volume.
- Consumers would be more likely to purchase the product at the display price from sellers with high review volume.
E-Cigarette Marketing on Social Networking Sites: Effects on Attitudes, Behavioral Control, Intention to Quit, and Self-Efficacy
At University of Georgia, Joe Phua uses his research expertise to analyze how emerging communication technologies influence consumer attitudes and behaviors with regard to ads, brands, and health issues. His latest work contributes to knowledge about the marketing on social-media sites of e-cigarettes—the smoking of which has become a serious health issue according to statistics from The Centers for Disease Control. Phua examined exposure to three types of e-cigarette marketing: sponsored ads, brand pages, and user-created groups on social-networking sites and their influence on health-related outcomes. More than 1,000 people participated in his online study. Results showed that “e-cigarette users who joined user-created groups had significantly more negative attitudes toward quitting and lower behavioral control, intention to quit, and self-efficacy than those who were exposed to sponsored ads or who followed brand pages.” Among other findings and recommendations:
- Social identification, attention to social comparison, and e-cigarette subjective behavioral norms moderated between exposure to e-cigarette marketing and health-related outcomes.
- Regulators and practitioners should work together to establish guidelines for e-cigarette marketing on social networking sites, particularly user-created groups and brand pages.
Coming in September 2019:
What We Know about Neuroscience Methods in Advertising
As a preview to September’s special theme section on neuroscience methods in advertising, John Ford reviews seminal work that JAR has published on this topic.